Tuesday, April 23, 2013

Everyone says you can't predict the future. I say up to a point you can. You can look at technology, costs, consumer demand and from there you can make some comfortable assumptions.

Note: This is an extension from my older post, Green Sprawl. I recommend you read this first, to understand the living and environmental advantages of intelligently composed low-density development. We can, and will, drive forward richly green garden townships of the type where the houses are hard to see for the trees.

Demand:

We know that over 80% of the market wants a detached home in a suburban setting (and maybe even a rural setting, if convenience wasn't a problem?) which some surveys have shown. This should surprise none of us. Everyone wants their own space, and most want to have part of their own space as outdoors. We also know that the vast majority of people like the ambiance of trees and gardens, and they don't like traffic noise. You only have to be human to work that out.

So the question is: Why do we still live amongst traffic noise and look out at ugly wide roads, and dingy lawns with usually equally dingy gardens, and a poor extended view, and too often tolerate a lack of sometimes sorely needed privacy?

Obviously we are compromised. Suburbia as we know it is a compromise. We only have what we want in part because it costs too much money (and time) to live in a more idealised domestic setting.

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The following image was taken from the New Zealand Herald's survey, showing common preference's in New Zealand.

Supply:

Well all of that is about to change, and drastically. Google (and now other players) are in a race to deliver driverless car technology to the market. The technology itself is already here and it works. First commercial deployment will be between 5 and 10 years from now. [excluding the ULTra system, which is available today].

The consequence of this will be an explosion of a new-type of sprawl, that I call Green Sprawl. Green sprawl can be described as resort-style property development supported by cheap, discreet, and environmentally benign full-automation electric transport.

How do I know this is the future? Because I know it's what most people want, and we can now give it to them at less cost - not more. It's that simple. Proximity to services will not be a problem. This is due to the virtues of telecommuting, the fact that services and jobs follow the people as cities expand (the modern city is polycentric - not CBD-centric), and the fact that fully-autonomous vehicles can reduce real transport costs by a factor of 10 or more.

Green sprawl will generally be built in "clumps" as small satellite townships, on the fringes of major metro's. The good thing about this is that the developments can be built in an aesthetically coordinated way, and economically at scale. The incentive is there for the developer to make the whole development look and feel good to live in, because he's concerned with the sale-value of every home within the development. (He won't want to build ugly houses that other people have to look at...as it will affect the sale-value of those 'other' houses, which is of course his concern).

So where will the growth happen?

Agglomeration advantages are clearly real. When you link people together in a city, each individual functions as a resource and opportunity for the others, and agglomeration facilitates the obvious advantages of competition and scale. This is why we generally earn more in big cities. However, the advantages of higher density saturate and can backfire at a point, because higher densities, when excessive, lead to aggravated traffic congestion and other problems such as expensive structures (up costs a lot more to build than out) and high rents.

Appreciating this, and appreciating the nature of consumer demand, we will see that the optimum will shift more heavily toward lower-density cities that are geographically massive.

If you're going to build a new township of green sprawl, then you might as well do it next to a big affluent city. Why wouldn't you, when you can have the best of both worlds (small and big) and at the same or even less construction cost?

Note: Creating the "small town oasis" in a large metropolitan district is easy enough. It's simply a matter of structuring access to your development so that it's a place where people go to and not through ie. don't run a thoroughfare right through the middle of it. Segregating cross-traffic is key.

Which metro's will be favoured?

In a world where accessory products are ever easier to come by, I believe that people will become more temperamental about where they live in terms of climate. There will be a strong growth preference for cities that have great climate and topography, and especially if they're coastal.

Queensland, especially Brisbane, should be a favourite for Australia, and expansion from the north of Aucklandshould be a favourite for New Zealand.

The politics:

Some cities in this world are dedicated to forcing high densities, and green sprawl is the opposite of what they want to achieve. They want to replicate the atmosphere of Hong Kong - not Fiji.

No matter. If they want to fly in the face of consumer demand and commit economic suicide, then that is their concern. But rather than suppressing sprawl, you will see they merely outsource it. It will go to other cities and states that allow for geographical expansion. Already we are seeing this trend in America, where cities like Houston, Texas have growth rates 4x greater than cities like Los Angeles, the latter of which severely restricts expansion.

Conclusion:

So that's what I see as the future of our cities. Massive, clustered growth around big, metropolitan cities that can offer "best of all worlds". We will see major, green low-density urban expansion integrated with ultra-efficient and silent electric transport.

Agglomeration advantages will be reinforced from telecommuting (which has much room for technical development, in itself) and full-automation transport that will be supported with new over and under-passes, eliminating all congestion. (With full-automation you can build tunnels at about a half the cost, and put 5x the number of cars in them via platooning).

The big cities will get massive, yet in an environmentally positive way, and the small cities will stagnate or decline. I can see a lot of ghost towns developing.

There will still be a place for high-density. Indeed, I think we will see a developing contrast of extremes. The CBD's of big cities will get more dense because full-automation cars allows for the removal of parking requirements, liberating development space and making walking more easy. These CBD's will offer wildly varied recreation. Exciting centers of "bright lights", of which are so easily accessible, will only further reinforce the appeal of the biggest metro's in growth dominance.

With the introduction of fully-autonomous cars, it will be a fascinating evolution.

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Addition: 12-5-13: Organic cities:

I don't believe that you can underestimate the value of providing people with top-quality food. It penetrates deeply to real living standards, and should on its own be a significant driver in city structure and form, for in the future and more so than today.

One of the problems with the logistics of our modern cities is the large time-gap between harvest and consumption, particularly for foods that depreciate quickly such as fruit and vegetables. The result is too often tasteless, nutritionally compromised food.

Full-automation transport supporting micro-cars will turn this on its head. It can reduce the general time-gap between harvest and consumption to as little as 2 hours or less, with the potential for aggressive streamlining of the supply-chain.

With streamlining in food production, we can and will avoid all kinds of parasitic costs that we tolerate today, which will reinforce the appeal and drive greater demand for [otherwise] more expensive organic foods. If the difference is a ~50c addition on an already cheap meal, why then would you tolerate insecticide with your cauliflower?

When people can order-up a meal that's second to none in nutrition and taste, and it's cheap, and can be delivered in 20 minutes or less, then this capacity in itself will function as a major driver supporting the growth of a given city.

However, of course, to achieve this effect your city must still be relatively agrarian. Orchids and vegetable farms cannot be more than, say, 200 kilometers away, and so the soils and climate of the surrounding area must be able to support the production of foods with low real shelf-lives.

In response to the natural demand for premium food, I believe we will see reinforced growth preferences for cities within the more favourable climates. Climates not just supporting beauty and natural attractions/recreation etc, but climates supporting immediate access to quality food.

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Addition: 14-5-13: Social segregation: It's human nature to want to mingle and be amongst your own kind, at least generally. And it's most certainly human nature to want to avoid the company of people who are emotionally disturbed and/or dangerous. Facilitating this demand is important for the prosperity of a city.

In the modern western world the underclass is growing, as clearly pointed out by the social analyst Charles Murray [Murray's generalised definition of the underclass: Fatherless homes, chronic welfare dependency, unemployed young men with no desire to find work, criminality, etc. And if I may add the more important bits that I think he left out: Prevalent and serious child abuse, and child neglect, reckless promiscuity and drug abuse].

Murray has pointed out that the American West has attempted to solve the problem of its underclass via social programmes meant to 'cure' people of their upbringing. However, this has been tried for decades now, failed miserably, and so America has (successfully) moved onto plan-B. According to Murray, America has "solved" its underclass problem by segregation. The underclass has been removed from "higher" public view into segregated zones - out of sight, out of mind.

Without going into the politics of the underclass, the fact remains that no "good" citizen wants to live amongst it if they can help it, especially not if they have children. This is not snobbery - it's human. Everybody wants to live in a happy, safe atmosphere, and the underclass are not generally conducive to this.

And this is where we see a further major advantage of living in a rapidly growing, large city. It allows for the easy development of socially-controlled communities, which in turn allows people to isolate themselves from the underclass, but without having to do so with hefty property inflation so as to price them away from their locality. You can instead segregate directly, and therefore cheaply.

With the internet being used for video interviews, and also basic screening for criminal records, etc, people can choose their own company directly and develop their own communities, and irrespective of personal incomes. This is a powerful advantage that will further drive demand for the biggest growing cities.

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Addition: 03-6-13: Design revolution? When my brother designs a house he spends a huge amount of time with his eyes closed, simulating in his imagination what it will actually feel like to live in, as he walks through the home in his mind. It's a strenuous challenge even for the talented - yet essential for good housing design.

Countless houses, including expensive ones, have major mistakes in their design compromising their liveability. And a huge amount of this revolves around people embracing "great ideas" that have not been simulated properly.

Well, we now have the tools for accurate simulations accessible for everyone, using 'virtual reality' systems. We can design a home, put on the goggles, and see whether or not we have conceived of something that actually feels good to live in - or not. Refer to the following video:

I do not believe we can underestimate the value of being able to design homes with virtual real-world feedback perception. At a guess, I would say it could add as much as $100,000 of comparative value on the average home in a new development. Virtual reality systems also, quite importantly, make it a lot easier to sell a home off the plan. This reduces investment risk and therefore costs.

The point? New technology compounds the competitive value of new-builds over existing housing stock, further driving investment in new-builds which will lead to an ever more rapid expansion of cities in idealised locations.

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Addition: 24-10-13: Privatisation of urban life?

A curious feature of a growing city, based on driverless car technology, is that it could (and I believe will) lead to the exaggerated development of highly privatised lives.

Every day we go out of our homes we are constantly dealing with strangers - casually or specifically. But in a driverless-car world the streets will be mostly empty; and by today's standards, strangely so. People will do almost all their business online, and their purchases online; and when people do need to travel a car will take them to their destination-building directly, foyer to foyer, just like a private lift in a building. For the most part we will only interface with people who we genuinely need and want to see.

People will still mass into groups of unknowns, but those groups will tend to be of and for a specific kind - like a club. Your city and your life will, in effect, reduce itself to your select needs and preferences, and everything else around you will functionally disappear.

In my view, this would be a positive thing. Privacy is vital for reducing social stress and, conversely, facilitating genuine relationships (via freedom of association and disassociation). Research has also indicated that cities (as we know them) lead to forms of social stress that are significant enough to be directly observed with brain scans. Alas, we are tribal animal at the end of the day - not a mass-city animal.

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Addition: 31-10-13: The future of work.
The Internet is about to grow limbs via robotics. The online (based) world, for most operations, is going to swallow much of the existing commercial/industrial world due to its ability to actualise a drastically superior cost-base, of which more traditional operations can't compete with. (This is more likely to happen via start-up's than traditional operations reforming themselves, because the latter has too much old inertia to deal with and on too many levels). General economic operations will be streamlined aggressively, and we will finally give birth to a true technologically advanced society.
Ok. The theory goes that as work gets automated, or made more efficient in general, then jobs are lost and prices for products fall. This in turn liberates the consumers dollar enabling them to spend their money on other things, which in turn drives new job growth in those industries of which support those other things. Now that is sound; that is the way it's worked for as long as we can remember. Our economies have progressively evolved from (only) supporting our core needs on the most basic of levels, to economies that support luxury as well.

However, I believe this principle has limits and we could soon see a shift from this progression. With driverless-car technology co-functioning with the Internet as a supporting structure, the room for automation via mobile robotics becomes massive. We may get to the point, soon enough, where there's little for people to do that can't be done better and cheaper with a robot, relating to low-skilled jobs, and also many systematic high-skilled jobs for that matter. This is not necessarily a concern for people on the right-hand side of the bell-curve, who can up-skill and master more technically-orientated work, but it's a concern for people who are specifically dependant on low-skilled work. Unemployment for the latter group could become seriously entrenched. This is not an issue so much of wealth, as a robotised society should be extremely efficient - it's an issue of human dignity.

So how do you deal with this problem? I don't have all the answers, but one thing I suggest (in this event) is to simply give the less capable social classes their privacy. Let them have their own autonomous communities, independently worked and managed, where they can develop their own cultures and pastimes. Don't ram their status down their throats by forcing them to live like a redundant slave-class alongside you. By giving people their privacy, we allow ourselves to be no longer part of their social world of "significant others", which should greatly reduce the psychological impact of (otherwise) being made to feel inferior, or even worthless.

Note that with the implementation of driverless cars the actual speed of technological progress, in terms of implementing advanced systems into civil operations, should accelerate. Driverless cars allow us to robotise general operations efficiently by supporting rapid and low-cost access for this technology. That is the difference. It's about to become an innovators economy, more than ever.

4 comments:

I would contend that the utility of large cities as a force multiplier of economic development are nearing an end. The cost of maintaining such structures (from the streets to the water delivery and treatment to general maintenance) are starting to outweigh the benefits.

In conjunction to your prediction, I think we will see a transition to lots of small cities from around 25-100K.

I essentially agree, but what I'm effectively suggesting is that those 'small towns' will be placed around big cities as satellite developments.

Note that full-automation transport should get most of the trucks off the road, which do most of the damage. Apparently 2x the concentrated weight = 16x times the road damage, so reducing freight to many small cars would take huge pressure off road maintenance.

The book: Started a notable amount of it, but it has been hard to find time lately. Especially with my focused interest in advocating against our local council(s) economic suicide agenda, of forced urban intensification. Hopefully it will be done in no more than a year or two.

I would like to see virtual reality technology used in the design process of any environment intended for living - not just houses - but even with virtual reality, many people will continue to sacrifice the warm, uplifting feeling that comes from a well-designed living space, in favour of the latest unlivable trends which are meant to impress their peers.Having said that, affordable virtual reality will give us the time and privacy we need to 'sit inside' many different virtual homes without being influenced by the subtle feelings that we get when we are standing in a stranger's house.

Thank you Richard - totally agree. Fashion doesn't really belong in houses. Feel-good is what it's about. If you're going to be consuming it for the rest of your life, you hardly want to build on the back of a datable novelty.

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The Great New Zealand Housing Disaster: Click on The Real Deal, below.

Why would you buy a home for $500k when you can build a new home for $200k at the city fringe? Answer: Because you can't build a home for $200k at the city fringe. Because the cost of land has been artificially inflated, and to the point of ridiculous. This is the heart of the reason why housing in New Zealand has been able to inflate to such extraordinary degrees. The supply response to increases in demand has been deliberately choked off. At base, this so-called complex issue really is that simple.